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Region IV | Resources

Start a Small Business The Innovative Way

By Ashley D. Bell, SBA Region IV Administrator

It is not surprising that starting a new business can be challenging. It is intimidating to know where to start, learn the rules, regulations, and licensing requirements, and to navigate the overload of online resources. There are many reasons why more Americans don’t follow their entrepreneurial dreams; yet they should. Fortunately, there are creative ways to start a new venture with the help of the SBA and the resources that the SBA provides- without breaking the bank. Below are some options to consider before starting your own small business that can help you follow a path that leads to entrepreneurial success.

Purchase an Existing Business:

For starters, perhaps you should consider buying an undervalued existing business. During economic downturns, many owners are forced to sell their ventures for various reasons. This creates opportunities for individuals with available capital to purchase existing companies under more reasonable terms. An established venture is move in ready the day you buy it, and assets and equipment could be included in the sales price. Along with the business, you buy an already established client base. Customers may be familiar with your brand. Lenders are often more motivated to provide financing to an existing business. Moreover, you could inherit a trained, loyal, and experienced staff.

Seek Equity:

Another innovative option is to exchange salary for an equity position in your business. Most existing businesses are hungry to hire experienced, driven employees. Cash-strapped businesses that are growing, but need new talent could be willing to exchange an equity or stock position in the company in lieu of traditional salary and benefits. This new equity position could eventually provide an employee with an ownership opportunity. Consider working part-time at a startup while maintaining your regular job to learn the business and make an offer to purchase the firm or a portion of the firm at a later date.

Shared Work Space:

Virtual office and shared creative work spaces are the wave of the future. There are many creative alternatives to traditional office or retail spaces. The Internet is the location where most new small firms market and sell their products and services in order to become global quickly. Working from home and using shared office services is another way to create a virtual office space. Virtual offices could significantly reduce the cost of your startup. A new trend is the development of large creative work spaces where tenants share open spaces, small private offices and even lunch areas.

Innovative Capital Search:

Use creative means to secure capital. An undercapitalized business could easily be a losing proposition. This is especially true when the economy is unpredictable. Obtain capital by bolstering your personal savings in advance of starting your business. Friends and family financing in exchange for stock or an equity position in your company offers another option. If you’re open to taking on new debt, try starting your business slowly by using internally generated cash flow for expenses and growth. The less debt you incur today, the better position your business will be in when you do apply for a business loan.

It’s Okay To Ask For Help:

Leverage outside counseling before starting your new business. Now’s the time to make an appointment with an SBA resource partner — including SCORE, Small Business Development Centers, Women’s Business Centers and Veteran’s Business Outreach Centers. The counselors at these organizations can help you develop a well-defined and comprehensive business plan, realistic financial statements and extensive marketing strategies. Studies have shown entrepreneurs who put a minimum of one year of planning into their new ventures have a better chance of succeeding in the long run. The SBA is always a resource for assistance as well.

Owning and running your own business may be the most gratifying move you make in a lifetime. Creating innovative strategies for starting a new business can help you follow and exceed your entrepreneurial dreams. For more information on SBA programs and services, visit www.sba.gov or contact your local SBA district office.

(Ashley D. Bell serves as the SBA’s Region IV Administrator and is based in Atlanta. He oversees the agency’s programs and services in Alabama, Georgia, Florida, Kentucky, Mississippi, North Carolina, South Carolina and Tennessee)